More than 45% of Times readers would be happy to pay a wealth tax as long as it did not include the value of their main home. A poll of 2,000 readers of The Times and The Sunday Times found broad support for increased taxes on assets and second homes as a way to help the economy recover. However, the Government is being urged to reform the UK’s tax system before pushing ahead with a controversial levy on wealth. Chancellor Rishi Sunak should focus on sorting out ‘badly designed’ charges such as pensions tax, council tax, inheritance tax and capital gains tax before introducing yet another levy, the Institute for Fiscal Studies (IFS) has warned. It comes after the Wealth Tax Commission, made up of economists, lawyers and academics, suggested a tax on people with assets of more than £500,000, or £1 million for a couple, including their family home and pension. Furthermore, experts point out that valuing people’s homes, pension policies and stakes in family businesses would be incredibly difficult. The tax would surely generate significant opposition, and risks sending out the wrong message. Government will be keen to project confidence and promote investment as the country seeks recovery from this crisis. A ‘soak-the-rich’ approach is unlikely to do much to achieve this. But a report by the IFS this week laid bare just how badly poorer communities have been affected by the pandemic, which could increase pressure to charge the wealthy.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of January 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.